It's the story of a how a runty horse stole the hearts of a depressed nation. But the nation is modern Japan, not the US of the Depression-era Thirties, and the horse is not Seabiscuit, as immortalised in the recent Tobey Maguire movie, but a nervy filly called Haruurara.

Seabiscuit became a symbol of America's spiritual and economic revival, the 100-1 outsider who overcame the odds to beat the nation's top thoroughbred, but there seems little chance of Haruurara pulling off anything like that. Boasting a unique losing streak of 105 losses in as many appearances, the seven-year-old has never placed higher than fourth, earning Haruurara a reputation as Japan's - possibly the world's - worst racehorse.

Ordinarily, such a miserable record might have meant the hapless nag ending up on a plate as basashi (horse sashimi), but these are not ordinary times in Japan. More than a decade of economic slump has sapped the confidence of a nation that was once tipped to overtake the US. The sight of Haruurara straining for the line one more time despite her terrible odds has "cheered people up", claims the horse's trainer, Dai Muneishi. "She warms people's hearts."

Haruurara's heart-warming effect has made her an equine superstar. Already credited with saving the fortunes of the Kochi racecourse where she built her inglorious career, the filly is the subject of a number of CDs, beer commercials, documentaries and books, as well as an upcoming movie about her life.

Haruurara charms, badges and T-shirts bearing the legend "Never Give Up!" now sell all over Japan, and her track appearances draw record crowds. Last week she was even eulogised by the Prime Minister, Junichiro Koizumi, who said he thought her story showed that "people shouldn't give up, even when they lose".

Now, in a twist worthy of a Hollywood melodrama, Japan's top jockey, Yutaka Take, has agreed to ride the filly in her 106th race on Monday, in a bid to give her at least one victory before she hangs up her saddle. However, the prospect of Japan's most famous loser crossing the line first has thrown her legion of fans into confusion.

"I don't really want her to win," says veteran punter Koji Nakamura. "Haruurara should leave the track with a perfect record of losses." But even with the most respected name in Japanese racing on her back, a win seems unlikely.

In her last appearance at Kochi racecourse, Haruurara finished ninth in a field of 11, defying the race's highest odds at 130-1. Since her debut in 1998, she has won a grand total in prize money of just £5,000.

Whatever happens, her role as prized national mascot has earned her a post-retirement paddock in an up-market stable outside Tokyo. And like Seabiscuit's trainer Tom Smith (played in the movie by Chris Cooper), who believed that "every horse is good for something", Mr Muneishi says he will keep backing his lovable loser: "As long as a horse can run, then I want it to run."